Precious metals saw significant price changes at the end of the year. On Boxing Day, Gold hit an all-time high of $4,550 per troy ounce. By December 29, Silver shot up to $84 per troy ounce. Platinum reached $2,490, and Palladium was close to $2,000 per troy ounce. These price increases were partly due to low trading volume during the holiday season. Concerns about shortages and dwindling inventories in China also boosted Silver prices. However, prices fell at the year’s end. On December 29, Silver dropped over $10, marking its biggest daily percentage loss in more than five years. Increased margin requirements from the CME and the Shanghai Futures Exchange resulted in margin calls, leading to forced sales. Still, the overall gains for precious metals over the year were impressive: Gold increased by 64.6%, Silver by 148%, Platinum by 127%, and Palladium by 77.5%.

Gold And Silver Price Surge

As the new year began, prices rose again, approaching the highs from late 2025. Gold increased by nearly 3% to $4,450, and Silver rose 5% to $76.6. Increased US military activity in Venezuela and a disappointing ISM manufacturing index increased the demand for safe-haven assets, affecting the US dollar and boosting interest in Gold and Silver. The market is experiencing high volatility, evident from the record prices of precious metals in late December 2025 followed by a sharp sell-off. The Cboe Gold ETF Volatility Index (GVZ) likely reached multi-year highs during this time, reflecting significant uncertainty in the market. Therefore, we should expect continued price swings in the coming weeks. The current rally stems from key factors that support higher prices. The recent US military action in Venezuela has raised demand for safe havens. Additionally, December’s US ISM Manufacturing Index dropped to a 14-month low of 47.1, which puts pressure on the US dollar. As a result, Fed funds futures now indicate more than a 75% chance of an interest rate cut by the end of March, providing a strong boost for Gold and Silver.

Manage Leverage Carefully

Given these conditions, implied volatility on options is unusually high, making it costly to purchase calls for further gains. We should learn from the events of December 29, when margin hikes on Silver futures from CME led to forced selling and a price drop. This serves as a crucial reminder to handle leverage wisely and be ready for sudden reversals, even during a strong uptrend. In 2025, Silver’s 148% increase significantly outpaced Gold’s 64.6% rise, a divergence not seen since 1979. This has reduced the gold-to-silver ratio to a multi-decade low of about 54. While Silver currently enjoys momentum, we should keep a close eye on this ratio for signs of a potential reversion, which would favor Gold. Create your live VT Markets account and start trading now.

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